Donegal Group, Inc. · NASDAQ:DGICA
Donegal — Q4 2021 Earnings Presentation
17 slides from Donegal's earnings presentation, Feb 18, 2022
Slide 1: Fourth Quarter & Full Year 2021 Investor Presentation
Fourth Quarter & Full Year 2021 Investor Presentation February 17, 2022
Slide 2: Safe Harbor
Safe Harbor We base all statements contained in this presentation that are not historic facts on our current expectations. Such statements are forward-looking in nature (as defined in the Private Securities Litigation Reform Act of 1995) and necessarily involve risks and uncertainties. Forward-looki
Slide 3: Company Overview
Company Overview Donegal Group Inc. is an insurance holding DONEGAL GROUP INC. company whose insurance subsidiaries and Kevin G. Burke Jeffrey D. Miller President and Executive Vice President and affiliates offer personal and commercial lines Chief Executive Officer Chief Financial Officer of proper
Slide 4: Strategies to Provide Value to Stakeholders
Strategies to Provide Value to Stakeholders Strategically Delivering a Achieving modernizing our Capitalizing on superior sustained excellent operations and opportunities to experience to our financial processes to grow profitably agents and performance transform our policyholders business Implement
Slide 5: Significant Benefits to Shareholders from Mutual Relationship
Significant Benefits to Shareholders from Mutual Relationship • Pooling agreement fosters an environment of continuity and maintains superior employee relations in which the business can grow. • Shared combined business plan to enhance market penetration and underwriting profitability. • Product off
Slide 6: Valuation vs. Multi-Line Insurers
Valuation vs. Multi-Line Insurers Price-to-Book Multiple Source: FactSet; Price as of 12/31/2021 and latest reported Book Value as of February 10, 2022 1.87 1.89 1.58 Peer Average 1.23x 1.30 1.33 1.18 1.21 1.17 1.10 1.11 0.96 0.88 0.84 0.76 www.DonegalGroup.com 6
Slide 7: Mix of Commercial and Personal Lines
Mix of Commercial and Personal Lines Net Premiums Written by Line of Business Quarter Ending December 31, 2021 Commercial Lines Other Personal Commercial Auto 2.7% Commercial Multi-Peril 62% of NPW Commercial Auto 19.5% Workers’ Comp Homeowners Other Commercial 14.3% Workers' Comp 12.9% Personal Aut
Slide 8: Continued Growth in Commercial Lines
Continued Growth in Commercial Lines 100.0% 110,000 95.0% 100,000 90.0% 90,000 80,000 85.0% 70,000 80.0% 60,000 75.0% 50,000 70.0% 40,000 FY2021 Commercial Policies In-Force 107,000 65.0% 30,000 with Solid Retention Level of 89.7% 60.0% 20,000 10,000 55.0% - 50.0% 2012 2013 2014 2015 2016 2017 2018
Slide 9: Fourth Quarter 2021 – Overview
Fourth Quarter 2021 – Overview Solid Diversified Investment Underwriting Results Retention Portfolio Net Premiums Net Investment Investment Loss Ratio Expense Ratio Earned Income Yield $200.0M 69.7% 31.4% $8.2M 2.6% +7.8% (7 pts) 1 pt +8.6% +0.1 pt vs. Q4’20 vs. Q4’20 vs. Q4’20 vs. Q4’20 vs. Q4’20 P
Slide 10: Financial Results – Q4 & FY 2021
Financial Results – Q4 & FY 2021 (dollars in thousands, except per share data) Q4’21 Q4’20 Change FY’21 FY’20 Change Net Premiums Written $181,785 $169,420 7.3% $804,267 $742,140 8.4% Net Premiums Earned $200,040 $185,488 7.8% $776,015 $742,040 4.6% Better/(Worse) Better/(Worse) Loss Ratio 69.7% 62.
Slide 11: Results by Line of Business
Results by Line of Business • Achieved steady new business, coupled with high premium retention and solid Q4 renewal rate increases of 6.2% in Commercial Lines (excluding Workers’ Comp) • Strategically slowing new business while taking Q4 renewal rate increases of 3.8% in selective accounts to maint
Slide 12: Conservative Investment Strategy
Conservative Investment Strategy $1.3 Billion in Invested Assets As of December 31, 2021 • Investment portfolio emphasizes on quality and reliability • “Laddering” structure provides additional Corporate measure of liquidity 32.3% Mortgage Backed Securities (MBS) 18.6% • Invested assets increased by
Slide 13: Increasing Stockholder Value Over Time
Increasing Stockholder Value Over Time Strategic corporate initiatives implemented beginning in 2018 continue to drive operating improvements $1.72 $2.35 $1.13 Rated A (Excellent) by A.M. Best $0.56 Cumulative Dividends Paid Book Value $17.13 $16.95 $15.67 $14.05 2018 2019 2020 2021 www.DonegalGroup
Slide 14: Investment Thesis
Investment Thesis • Well-established regional insurance group with a diverse book of business including both commercial and personal lines • Continuing the shift in our mix of business with emphasis on commercial lines while strategically stabilizing personal lines to maintain a profitable book of b
Slide 15: Contact Information
Contact Information Company Contact Jeffrey D. Miller CFO, Donegal Group Inc. Phone: (800) 877-0600 x7357 investors@donegalgroup.com Investor Relations Contact Karin Daly Vice President, The Equity Group Phone: (212) 836-9623 kdaly@equityny.com Transfer Agent Computershare Trust Company, N.A. P.O. B
Slide 16: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures We prepare our consolidated financial statements on the basis of GAAP. Our insurance subsidiaries also prepare financial statements based on statutory accounting principles state insurance regulators prescribe or permit (“SAP”). In addition to using GAAP-ba
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of net premiums earned to net premiums written: Three Months Ended December 31, Year Ended December 31, 2021 2020 % Change 2021 2020 % Change (dollars in thousands) Reconciliation of Net Premiums Earned to Net Premiums Written Net premiums